Financiers generally require that a direct relationship be established between them and the consideration for this contract, obtained through the use of a tripartite act (sometimes called an act of consent, direct agreement or ancillary agreement). The tripartite act sets out the circumstances in which financiers may “intervene” under project contracts to remedy any breach. The Agreement contains provisions, including the following provisions. In such a scenario, the government agency may act as a subordinate lender, the tax authority as the lead lender, and the company (Y) as the borrower. In any case, since the company grants loans with the same assets to both financiers, the main creditor will want to enter into an intercredit agreement with the government agency to protect its interests. A take-back agreement is an agreement between the project company and the buyer (the party purchasing the product/service that produces/supplies the project). Project financing often incurs revenue (rather than being sold on a market basis). The Fisheries Agreement regulates the price and quantity mechanism from which revenues come. The objective of this agreement is to provide the project company with stable and sufficient revenues to cover the project financing obligation, to cover operating costs and to ensure certain necessary revenues for sponsors.

Concession documents are project financing documents issued by and between the project company and the public body holding the authority to award and approve the project. Concession contracts grant the use of public goods, such as.B. B of a parcel, road or bridge with the project company for a certain period of time, according to the conditions laid down. The intercredit agreement is concluded between the main creditors of the project company. This is the agreement between the main creditors in the context of the financing of the project. Major creditors often enter into the inter-creditor agreement to regulate the terms and common relationship between lenders with respect to the borrower`s obligations. A subordinated lender should apply for an exemption from a certain class of collateral that a senior lender has not included in its asset base. Once it has been agreed that there is a personal guarantee from the borrower`s investor or a guarantee in favour of the subordinated creditor, the subordinate creditor should ensure that the agreed rights are properly reflected in the agreement between credit institutions and that they are not subject to a standstill. A removal agreement is an agreement between the project company and the buyer (the party purchasing the product/service that produces/delivers the project). In project financing, revenues are often contracted (rather than being sold on a market basis). The purchase agreement governs the price and volume mechanism that constitutes revenue.

The objective of this agreement is to provide the project company with stable and sufficient revenues to pay its project debt, cover operating costs and provide proponents with some required return. The shareholders` agreement or SHA is an agreement between project promoters to form a special purpose vehicle (SPE) for the development, ownership and operation of the project. This is the most basic structure owned by promoters as part of a project financing operation. The shareholders` agreement deals with: The terms EPC contract and turnkey contract are interchangeable. EPC stands for Engineering (Design), Procurement and Construction. Turnkey is based on the idea that if the owner takes responsibility for the factory, he only has to turn the key and the factory will work as expected. Alternative forms of construction contract are a project management approach and alliance contracting. The basic content of an EPC contract is as follows: The above is a simple explanation that does not cover mining, shipping and supply contracts associated with the import of coal (which in itself could be more complex than the financing system), nor contracts for the supply of electricity to consumers.

In developing countries, it is not uncommon for one or more government agencies to be the main consumers of the project, taking over the “distribution of the last mile” to the consuming population. The corresponding purchase contracts between the authorities and the project may contain clauses that guarantee a minimum purchase and therefore a certain amount of income. In other sectors, including road transport, the government can tax roads and collect revenues while providing the project with a guaranteed annual sum (as well as clearly specified advantages and disadvantages). This minimizes or eliminates the risks associated with transportation demand for project investors and lenders. Project funding documents almost always – and should always – contain an agreement on common terms. A common terms agreement is an agreement between the project funders and the project company that defines the terms common to all project financing documents, as well as the relationship between them with definitions, terms, order of claims, and voting rights for waivers and modifications. An inter-commission agreement, commonly known as the Inter-Creditor Act, is a document signed between two or more creditors or several summit banks in the United States, according to U.S. data. Federal Deposit Insurance Corporation, as of February 2014, there were 6,799 FDIC-insured commercial banks in the United States. The country`s central bank is the Federal Reserve Bank, which was created after the passage of the Federal Reserve Act in 1913 and predetermines how their competing interests will be solved and how they can work in the service of their mutual borrower. In a typical scenario, there are two creditors participating in a particular agreement – one or more senior subordinated lenders and subordinated debt, in the case of senior and subordinated debt, we must first look at the capital stack. A loan agreement is concluded between the project company (borrower) and the lenders.

The loan agreement governs the relationship between lenders and borrowers. It determines the basis on which the loan can be used and repaid and contains the usual provisions of a credit agreement to companies. It also contains additional clauses to cover the specific requirements of the project and project documents. The inter-creditor agreement is extremely advantageous for subordinated lenders in the event of default by the borrower, as the conditions have already been set in advance, so it eliminates the confusion that can arise in the event of default. .